Simplify Expense Reimbursement Procedures for Employees

Over the past year, many aspects of the workday have only gotten more complicated. From coordinating team Zoom meetings, ensuring employees have all of the technology and equipment they need no matter where they’re working these days, to just finding a quiet place for yourself while your children attend school remotely, so much about our daily routines has changed. Haven’t we earned a change that simplifies our lives, even a little?

Reimbursing employees is not at all a new practice, but with all of our strides in business automation, it still is a tedious process for many employers. By implementing the right technology and processes, you can finally simplify employee expense reimbursement procedures at your company. 

If You’re Wondering if it Matters, it Matters

Reimbursements are any monetary payments made to employees in return for personal expenses incurred during the course of performing their job duties for their employer. These are payments separate from their wages (and therefore, not subject to taxes). In order to be reimbursed, employees must submit an expense report and provide proof of the purchase, typically with receipts, invoices, card statements, etc. After submission, it’s up to the employer to approve the expense and issue a payment. 

The reimbursement process is important because they ensure that work-related expenses are administered and settled efficiently, accurately and to the satisfaction of both you and your employees. Whenever your expense reimbursement procedures are unclear or too complicated, though, employees are more likely to commit errors during the process or may be discouraged from completing it altogether. 

When employees don’t claim a reimbursement for work-related expenses like travel, meals or entertaining clients, it could be potentially troublesome for employers. According to the Department of Labor, “wages must be paid free and clear of impermissible deductions – such as the costs of operating the vehicle or traveling on the road – that would reduce pay below the federal minimum.” In other words, the amount of unreimbursed expenses could put an employee’s income below minimum wage when they’re subtracted, resulting in noncompliance with federal law. 

Keep it Simple

You want to create a reimbursement process at your company that encourages employee participation, ensures accuracy and creates efficiency. Above all else, this means keeping expense reimbursement procedures as simple and straightforward as possible while reducing the number of human touchpoints that increase the likelihood of errors. 

Create a Viable System for Reporting Expenses

In order to set up a viable system, you first need to know which expenses will qualify for reimbursement. Not only should track employee expenses to help you budget better, but different expenses may have a different submission process depending on how your company is structured. Mileage, for instance, is not a typical “purchase” as employees are required to provide a mileage log rather than a receipt or invoice. 

The more digitized you can keep the reimbursement process, the more streamlined and efficient it will be. The best system will have a form employees can easily fill out and submit, and the system will ensure it goes to the proper channels. Not knowing how or where to submit an expense report can be one of the biggest obstacles in a manual reimbursement process. 

You also need to make sure that employees have the opportunity to provide all relevant information during submission. This includes when the expense was incurred, where it happened, what the reason for it was, what exactly was purchased and documentation proving its legitimacy.

Institute an Approval Process for Verifying Expenses

Depending on how many people are involved in approving employee reimbursements, there are several potential instances for the process to stall. Supervisors and managers may get distracted and lose track of expense reports. Accounting administrators may lose these payments amidst their other responsibilities such as calculating overtime and running payroll. Without introducing automation, there’s no guarantee that expense reimbursement procedures will be carried out in a timely and accurate manner. 

With a virtual, automated system, you can design the approval process that best aligns with your internal business workflows. Once an employee submits a reimbursement request, you can decide if it should first be reviewed by their department head or HR before being sent to accounting, or however it makes sense for you. 

Create Policy for Communicating These Procedures

The most important part of creating new procedures is making sure that people are actually adhering to them. As you work with other stakeholders to iron out how the process should look, it’s vital to formalize it in an easy-to-follow policy that is distributed to everyone in your organization. 

This document should be easy to reference by employees as questions arise. Therefore, you should make sure to cover topics such as reimbursement-eligible expenses, whether employees need pre-approval for certain expenses, clear submittal guidelines and the appropriate timeframe for requesting reimbursement after an expense is incurred. As an employer, it’s in your best interest to be as detailed as possible to avoid a situation in which an employee unknowingly finds themselves outside the scope of the policy. 

Streamline and Simplify Procedures With the Right Software

When employees have clear and simple expense reimbursement procedures to follow, they spend significantly less time documenting and submitting expense reports, and a digital system essentially eliminates the risk of inaccuracies or expense fraud. Expense reimbursement software such as SureMileage from CompanyMileage (along with its sister products, SureExpense and SureMobile) will help your company automate and streamline much of the reimbursement process. 

SureMileage keeps your business organized and on track.Employees are able to log trips, save receipts and submit reports in just a few minutes right from their mobile device. You have the freedom to structure the approval process to best suit your business; SureMileage can easily configure to meet your needs. Our system even integrates with all major accounting and payroll platforms. From start to finish, managing expenses is a simple, automated process.

Request a demo today and join hundreds of other organizations who have already automated and simplified their expense reimbursement procedures. Because in the kind of world we’re living in these days, at least one thing should be simple.